Review: “Saving Capitalism” by Robert Reich

As longtime readers are aware, I have never held untrammeled capitalism – or its most passionate devotees, Libertarians – in particularly high esteem. Whether it’s cultural decay, soaring levels of stress, or even exploding white suicide rates, the sociopathic pursuit of profit can account for much of the US’s decline.

At the same time, I’m not someone who measures a society’s health solely by looking at its system or policies in place; ultimately, a country’s people and culture determine its character. That’s why, in spite of my populist sentiments, I don’t think that there is anything inherently defective about capitalism. While my fellow blogger Robert Lindsay rightly decries the grotesque nature of American capitalism, I sometimes feel like he too often reduces everything to capitalism itself, which ignores crucial cultural context. Reading Saving Capitalism, written by former Clinton labor secretary and Berkeley scholar Robert Reich, reaffirms this belief. Even though Reich’s social commentary is very wanting and neglects many crucial factors (more on this later), his book should make it clear that the US’s resemblance to a banana republic says more about the American way than capitalism itself.

Indeed, one of the most crucial points Reich makes is that the way we discuss capitalism in American society is fundamentally flawed. Too often, we’re presented with a false dichotomy between the so-called “free market” and government intervention; as Reich demonstrates, such a debate is nonsense – the “free market” being a fiction. The infuriating truth of it all is that while our current oligarchs tout the benefits of free enterprise and competition, they furtively tamper with the market in order to ensure that it siphons yet more wealth to them. 

Examples abound of the myriad ways that laws and practices are structured in order to benefit the rich and powerful. For example, to add yet another item to the sordid list of American Exceptionalism, Americans pay more money for internet than most of their 1st world counterparts; in turn, they’re plagued with slower internet service than people in the civilized world – all because of the virtual monopolies that cable companies have. Any time a city builds a fiber-optic network, as Chattanooga, Tennessee, has done, giants like Comcast sue and go on the attack. Another vexing example is how Big Pharma extends patents – enabling them to keep charging exorbitant prices – simply by making minor (and ultimately insignificant) cosmetic alterations to drugs. And for my fellow millennials out there, I’m sure it will warm your hearts to know that while bankruptcy law enables corporations to cheat employees out of wages, declaring bankruptcy will not shield any of you from having to pay back your college debts; and should you remain burdened with debt up until your old age, these educational loan sharks can take your social security money. It also goes without saying that incompetent CEOs frequently get massive bonuses, and corporations can even deduct CEO earnings from their taxes. While they may not support Bernie Sanders, our elites are zealous proponents of big government. They just want it to promote socialism for the rich. 

It may be hard to believe in today’s new Gilded Age, but blatant socialism for the rich wasn’t always the norm. Reich examines the sense of corporate stewardship that prevailed – or was at least publicly endorsed – from the 30s up until the 70s. An influential 1932 study called The Modern Corporation and Private Property exhorted corporate leaders to balance “a variety of claims by various groups in the community and [assign] each a portion of the income stream on the basis of public policy rather than private cupidity.” Reich also quotes an early 50s issue of Fortune, which promoted the “industrial statesman.” The duty of CEOs was to guide the economy and ensure general prosperity; the Al “Chainsaw” Dunlap model of corporate leadership was still decades away. Consequently, Reich believes that we can salvage capitalism and make it work for the many as opposed to the few, and this period of American history substantiates his argument. 

However, I don’t share Reich’s overall optimism. As much as we may pine for the post-WWII economy, that era was an accident of history.  For most of this country’s existence, avaricious – though less crude – plutocrats such as Chainsaw Al have been the norm; just think of the Gilded Age and the massive inequality of the 20s.

My take is that the shock of the Great Depression, combined with the challenge of WWII, kicked the US into shape and fostered a greater sense of solidarity. There was likewise little international competition following the devastation of WWII, which left the US virtually unscathed. The influence of the Soviets also erected some barriers to global capitalism and all its shenanigans (and no, this isn’t an endorsement of Communism). However, following the Reagan Revolution, globalization, and the end of the Soviet threat, American business leaders had no real incentives to treat their fellow Americans right – and acted accordingly. Far from penalizing them, our culture in many ways lauds their predatory methods.

Therefore, while unions and other forms of what Reich calls “countervailing power” are good and all, I think that in order to save capitalism, American society itself is in dire need of saving. That’s why the greatest flaw of the book is Reich’s inability (or unwillingness) to delve into the American way of life. 

For starters, he completely ignores the issue of immigration, which is a rather glaring omission. While correlation doesn’t equal causation, it takes some willful blindness not to notice that stagnating wages for most American workers coincides with post-1965 immigration. After all, there’s a reason why corporate giants favor open borders. Reich’s obliviousness also extends to the racial realm, where he naively hopes that quarreling social groups can come together to combat the influence of the wealthy. This greatly downplays the increasingly rancorous nature of American society, which hinders the kind of trust and cooperation necessary to build “countervailing power.”

Such obtuseness causes progressives like Reich to extol the economic virtues of the 50s while neglecting to mention that the US back then was around 90% white and less open to immigration. Leftists are similarly oblivious when failing to recognize (or acknowledge) that their favorite European socialist utopias are much smaller and more homogenous than the US.

Such countries also don’t subscribe to the bootstrap myth (or at least not to the same degree), which presumes that the rich and poor deserve their lot in life. A major reason wealthy Americans get away with so much shit that would not fly in other advanced countries is because Americans subconsciously worship the rich. They’re also ashamed, and feel like they could have made it to the top themselves if only they worked harder. Reich doesn’t go into this enough, and seems to labor under the delusion that simply tweaking a few market policies can magically transform the US into more functioning 1st world countries. 

But obviously, the US is not Denmark; that’s why it will take more than electing new officials and passing laws to eliminate American kleptocracy. That means ending Ayn Rand worship and individualism gone off the rails; it means tempering the obsession with wealth and status; and most importantly, it means cultivating a greater sense of nationalism. When a businessman feels a sense of belonging to a nation and its people, he just might think twice about screwing over his kin. That’s why, without trying to sound like a tin foil hat type, I don’t think it’s entirely coincidental that the growing obsession with “diversity” and the SJW cult go hand-in-hand with our emerging banana republic.

In conclusion, the most important lesson to draw from Saving Capitalism is that nothing about our current economic system is set in stone. Human beings created this current malaise, and human beings can remedy it. But first and foremost, we must extirpate the US’s bizarre cultural pathologies that have rendered it the 3rd world of the 1st world.

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7 Responses to Review: “Saving Capitalism” by Robert Reich

  1. Bay State Guy says:

    Bang on about ‘worshiping’ the monetarily wealthy. That is why voters like Trump but wouldn’t support Buchanan.

    but not everyone worships them, observe:
    http://www.telegraph.co.uk/news/worldnews/asia/china/11399732/China-executes-Ferrari-loving-billionaire-gangster.html

  2. Bay Area Guy says:

    Interesting article. Let’s just say that there’s a reason why China rises while the US decays.

  3. Quartermain says:

    Excellent analysis, I will be back to rant… I mean comment later.

    • Quartermain says:

      Yes, there are some that worship the wealthy, many more just worship wealth without caring how they get it or who gets hurt even harmed.

      A dear, late friend of mine said that the majority of problems we have are spiritual and asked “What political solutions can there be for problems of the spirit?”

      I just got done shoveling the driveway and my brother’s. I’m tired so I will rant later depending on how much energy I have.

      • Bay Area Guy says:

        many more just worship wealth without caring how they get it or who gets hurt even harmed.

        Indeed. And again, I think a lot of it goes back to the whole bootstrap myth. If someone’s rich, then he must be conscientious, driven, intelligent, and have an overall solid character. Otherwise, he wouldn’t have made it to the top.

        The legacy of Calvinism lives on.

  4. Bryan says:

    Or could be that today’s American robber barons do feel nationalism… Just not to the US. Which actually supports the banana republic thought.

  5. Pingback: Robert Stark interviews Bay Area Guys about the case for Economic Populism « Attack the System

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